How to hire for your startup

A few thoughts from last night’s panel session…

Listening to the challenges voiced by founders in our Warner Yard community and our portfolio at Playfair Capital, it’s clear that hiring great people tops the list (or comes very close). Some have described the current job market for engineers, designers, and biz dev folks as a war for talent. Research by Adzuna and Silicon Milkroundabout in September 2013 showed there were 4,753 startup jobs advertised across the UK, up by 44% from the same period in 2012. With appealing working conditions vs. traditional corporates, great minds, challenging problems being solved, the sense that failure is OK, and boat loads of private capital flowing into the market, startup jobs are in demand. But supply is limited. New initiatives like that of the UK Government to introduce coding into schools for kids aged 5–16, as well as the rise of postgraduate programs like General Assembly, are helping. In the meantime, though, we sought to field tips and tricks from seasoned in-house and external talent scouts from Oxford Knight (Abdul Muhit), Improbable.io (Aaron Neale), and Maven Ventures (Michelle Coventry).

I’ll share some of the interesting snippets from the panel session on hiring talent into an early stage technology startup we held at Warner Yard last night.

Hire for fit

Asked which of passion, competency for the job, and fit within the team/organisation is most important when considering a new candidate, a resounding priority was fit. Leadership IQ research shows that 46% of new hires fail within 18 months from starting their jobs. What’s more, in 89% of cases this is attributable to a lack of cultural fit. In only 11% of cases is failure a result of a lack of technical competence on the job. What that means is cultural fit between employer and employee is absolutely crucial to determine the outcome of this relationship. As a founding team, if you’re able to control one more variable in the equation that charts the outcome of your venture, you’d be foolish not to pay close attention to it. So here’s some ideas to gauge cultural fit:

When interviewing a candidate, ask them what they would do work wise if your company weren’t to exist. If they’re passionate about the problem you’re solving and the people/organisations suffering as a result of inadequate solutions, the answer should be along the lines of “I would be working on this exact challenge”. If they’re not truly committed, answers will be vague ramblings about working at some other tech company tangentially related to yours.

Invite the candidate down to the office on a Friday late afternoon for a casual chat with the team. Have them speak with members of your team about what they’ve been working on during the week, why they took one approach to solve a problem over another, and see how the candidate interacts with your team in a more relaxed setting. Does he/she listen and proactively share opinions, or do they take a back seat and appear to be more of the disinterested type? You might even considering taking the candidate out to the pub in a completely non-work related setting to tease out whether they’re someone you bond with on a personal level. The “can I grab a beer with him/her” is always a solid test. If there’s no connection, forget it. They (and you) won’t last long.

Hire for what your needs are

There’s lots of talk about hiring the absolute talent best you can, i.e. taking the Jeff Bezos approach of needing each new hire to be stronger than the last one. While that’s generally a goal to aspire to, and I would certainly endeavor to do the same, it’s important to take stock of what your current needs are and exactly what you’re hiring for. For example, are you at the idea stage and need to hire an graphic/UI designer to mock up a clickable prototype to show prospective customers or engineers what you envision the product will do and how it’ll do it? Or have you refined your product spec and understand your customers to the point of being ready to dedicate resources to writing code to bring it to life? In the former case, you might be happy with someone who can work for you over the short term until you reach the next milestone (clickable prototype). In the latter case you’d probably want a strong core engineer who is invested in the long term and can act as an anchor for your future hiring needs.

Ask candidates what they think

While a capacity to execute tasks is obviously a requirement for doing a job successfully, hiring individuals who think deeply about what they’re doing, why, and how to improve, is highly desirable. This is one of the differentiators between individuals who work because they need to versus people who work because they thrive on the challenges they solve everyday. A way to guage this is by asking a candidate to do a teardown of your product or the area in your business that they will work in. Take an example of a potential engineering hire. Have them reflect critically on the product and discuss it with the engineering team. Is the way in which the product is built the optimal approach today and will it last into the future? What would they have done differently and what impact would that have on value gained by the user? What could be added to the product to extend it’s functionality and differentiation? Are there any low hanging fruits that will result in material improvements? Assessing how a candidate undertakes this exercise will reveal how their mind works and whether that’s a good fit for your company.

Make the hiring decision that is best for your company

This sounds obvious, but I think there are two points worth emphasising here.

The first is that hiring decisions should ultimately be made by management who operate with the company’s intentions in mind, and not the intentions of individuals. What that means is that individuals shouldn’t shed personal biases on candidates. For example, say you’re a small team and are interviewing an experienced sales person who will work alongside your less experienced and older sales guy/girl. There might be natural bias felt by your existing team member against the new hire because of the age and experience gap. They might even feel threatened that the new hire will take responsibilities away from them and make them redundant. But that shouldn’t be the lens through which an existing junior team member should view a new hire. One should instead view this as an opportunity to learn faster and be challenged. So what’s the way to avoid that? Make sure that decisions are ultimately made by management who undertake to do what’s best for the company.

The second point is to conduct the interview process in isolation. Because founding teams spend close to every waking hour together in the early days, it feels natural to share your thoughts on a candidate with your co-founder after you’ve interviewed them. In fact, you might not even need to speak to convey your thoughts. To ensure that biases are not transferred from one interviewer to another, try to conduct isolated interviews where you don’t see or speak to one another. You’ll find that your downloads from these interviews will be much more true to your opinions than before.